Cryptocurrencies with a small market capitalization are compared to penny stocks in “The Wolf of Wall Street.”

The high price volatility experienced by crypto assets (which have decreased market capitalization) is comparable to that of penny stocks, according to Jordan Belfort, a former stockbroker who is also referred to as the “Wolf of Wall Street.” Belfort made this comparison because of the similarities between the two types of investments.

Penny stocks are extremely speculative shares with a value of less than $1 that are issued by unidentified and small companies. In most cases, they either generate enormous profits for their investors or see a significant decline in value. Brokering contracts for such stocks was partially to blame for the meteoric rise in success enjoyed by Mr. Belfort during the 1990s, as well as the subsequent difficulty he had with the United States Securities and Exchange Commission (SEC).

According to Jordan Belfort, cryptocurrencies with low market caps are comparable to penny stocks.

On August 27th, while participating in an interview conducted by Yahoo Finance, Belfort stated that the various types of investments have a very probable cycle in which great returns can be generated, but investors who were unable to cash in their gains at the exact same time may get burned. This statement was made by Belfort on the occasion of the 27th anniversary of his appearance in the interview.

He added that with the respective extremely low cap contracts, there is a chance for them to have massive money. However, it should be remembered that the investors are playing in the playground of someone else, and they risk having what they have taken away from them. He continued by saying that there are a greater number of opportunities to fail.

Additionally, Belfort recommended that investors only put money into crypto assets that have a low market capitalization if they want to allocate a small amount of their portfolio to taking risks. According to his advice, they ought to avoid doing anything that would put them in the category of a significant investment. He revealed that very little research has been done on the question of whether or not someone can protect yourself from assets that have a very modest capitalization, other than entering the market at an extremely early stage.

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It doesn’t matter if the company has good or awful management, he said; what matters is that if it has a low market capitalization, its share price will eventually soar to an unsustainable level, at which point investors will dump it. Belfort is one of the most well-known names in the world of finance, and in recent years, he has worked with some of the most notable financiers in the world, like Kevin O’Leary and Mark Cuban.[rb_related title=”More Read” style=”light” total=”4″]

In the month of February in 2018, he forecast that the price of bitcoin would fall all the way down to zero. He highlighted complaints against the purported applications of Bitcoin in payments, arguing that it should only be used as a vehicle for investment, and he projected that the pressure from regulators would eventually put an end to its existence.

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